Two rival car import firms are suspected of spying on each other, as are two of Israel's major satellite and cable television companies.

No charges have been brought so far and the companies at the centre of the police inquiry say they have done nothing wrong and are co-operating with the authorities.

Police fear that as many as 60 Israeli and international companies could be involved or affected.

Trojan horse viruses can infiltrate company servers

Trojan horse viruses work by installing themselves within a computer system and then allowing hackers to monitor, track or even control that system.

Police have arrested an Israeli man living in London, 41-year-old Michael Haefrati, on suspicion of writing the software and then selling it onto middle men acting for interested parties within the corporate sector.

Company executives, private detectives, and former members of the Israeli state security services are among others already arrested.

"Above all it's a story of company fat cats who left their morals in their limousine," said Sever Plotsker, a commentator in Israel's mass-market newspaper Yediot Ahronot.